Posted!

Join the Conversation

Comments

Welcome to our new and improved comments, which are for subscribers only.
This is a test to see whether we can improve the experience for you.
You do not need a Facebook profile to participate.

You will need to register before adding a comment.
Typed comments will be lost if you are not logged in.

Please be polite.
It's OK to disagree with someone's ideas, but personal attacks, insults, threats, hate speech, advocating violence and other violations can result in a ban.
If you see comments in violation of our community guidelines, please report them.

OPINION

Still seeking right path to scale "fiscal cliff"

The Town Talk
Published 11:01 p.m. CT Aug. 8, 2017

CLOSE

Commissioner of Administration Jay Dardenne spoke to the Rotary Club of Alexandria about the state's budget crunch at their weekly luncheon.

Buy Photo

Jay Dardenne (back, right), commissioner of the Division of Administration, was the guest speaker at the weekly luncheon of the Rotary Club of Alexandria.(Photo: Melinda Martinez/The Town Talk)Buy Photo

Remember those Saturday morning cartoons, when Wile E. Coyote would chase the road runner and end up running off a cliff? In the cartoons, the coyote could walk or run off safely for a while, even standing for a few seconds despite the fact there was nothing under him providing support. It wasn't until he looked down and realized he wasn't standing on anything that he fell.

It has been a little bit like that with the state legislature. For years Louisiana has been getting less revenue, yet we have continued to spend money like nothing has changed. In terms of our metaphor, state lawmakers have been the coyote and, although they no longer had the financial support to stand on, they didn't look down and kept going,

Now, with more than $1 billion in tax revenue set to expire in the coming year and nothing in place to make up for that projected shortfall, it appears the coyote is about to look down, thereby triggering a catastrophic fall from the fiscal cliff.

Commissioner of Administration Jay Dardenne was in town Tuesday to address the Rotary Club of Alexandria, and his topic was the perils of the impending fiscal cliff.

In his remarks, Dardenne didn't advocate for any particular solution. He did his best to play it down the middle, giving some background on how the state got to where we are today and breaking down the state budget and how nearly half of the $9.4 billion of the state's general fund is dedicated, leaving less wiggle room for legislators seeking to make cuts.

Dardenne tried to make it simple: The state either needs to find the revenue to meet the current spending obligations -- which means taxes and fees -- or they have to make cuts. Big cuts -- on average 20 percent across the board. But it wouldn't really be across the board because of the aforementioned dedicated expenditures. That's why things like higher education and health care get cut so much, they are among the few places that can be cut.

In his remarks, Dardenne tried to dispel critic's claims that government has grown or gotten too big by claiming there have been some small reductions in those expenditures of late.

But what we found interesting were the years Dardenne chose to illustrate his overall points. The two years he highlighted from the past were 2008 and 1982. In 2008, the state received huge influxes of money for Hurricane Katrina recovery. And in 1982, the peak of the oil boom, mineral revenues made up 42 percent of the state budget. Today, with oil at less than $50 a barrel, mineral revenues are closer to 5 percent of the budget.

The current fiscal year budget is $32.7 billion -- the same as it was in 2008. But current revenues aren't as high as they were then. Oil prices are lower and there is no big infusion of money to recover from Katrina.

Yet we have continued to budget expenses like we have that money coming in. As a result, we now have two basic choices -- both painful. We can either pony up the money ourselves in taxes and fees, or we can cut back on state-provided services and live within our current revenue means.

In hindsight, we wish our coyote had looked down sooner. There still would have been a painful fall, but the canyon wouldn't have been as deep as it is today.